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2008 April 15   08:11

Poland, Ukraine sign deal on oil pipeline bypassing Russia

Poland and Ukraine yesterday stepped up plans to extend an oil pipeline that bypasses Russia, a duct that could help diversify supplies and reduce Moscow’s energy clout in the region.
In a ceremony in Warsaw, Polish President Lech Kaczynski and his Ukrainian opposite number Viktor Yushchenko looked on as oil company officials from the two countries signed a deal on a feasibility study for a new network that could eventually link the Caspian Sea to the Baltic.
Yushchenko said the initial findings should be ready by May, adding that the study would help set the terms for a planned refinery in Ukraine.
Last October, Poland, Ukraine, Azerbaijan, Georgia and Lithuania - which were all formerly in the communist bloc — set up the ‘Sarmatia’ consortium to build a new pipeline by 2011.
The idea, Kaczynski said yesterday, was to create a “new energy zone” in the region.
The Polish leader has previously said the project will have “a huge political impact”, although he has also downplayed its anti-Russian image.
Most ex-communist countries in Europe, like much of the rest of the continent, rely heavily on energy imports from Russia.
Many are seeking to diversify their suppliers amid fears that Russia is increasingly exploiting its oil and gas market punch to try to tame pro-Western governments which fail to toe Moscow’s line.
The Sarmatia plan involves extending an existing pipeline running from Ukraine’s Black Sea port of Odessa to Brody, near its western border with Poland.
Opened in 2002, the Odessa-Brody duct was meant to cut Ukraine’s reliance on Russian oil and also pump crude to countries further west.
But when Ukraine failed to clinch the necessary oil supply deals with other countries it grudgingly agreed in 2004 to transport Russian oil in the opposite direction, for export from Odessa’s tanker port.
The plan is now to extend the pipeline to the central Polish city of Plock, home to the country’s largest refinery, allowing new supplies to be shipped onwards to Poland’s Baltic Sea port of Gdansk.
The goal of the Sarmatia network is to enable oil to be pumped from the energy-rich Caspian Sea nation Azerbaijan – and potentially Kazakhstan – through Poland and on to western European markets.

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